Milan (AFP) – A Milan court on Monday upheld Telecom Italia’s appeal against an activist fund’s request that the replacement of six board members be put on the agenda of the company’s shareholders meeting scheduled for Tuesday.
The board of directors of Telecom Italia (TIM) had lodged the appeal alongside French telecommunications giant Vivendi, its largest shareholder with 24 percent.
Vivendi has de facto control of TIM thanks to its stranglehold on board and executive positions.
The motion to replace the board members was proposed last month by activist fund Elliot, which holds an 8.8 percent stake in TIM and has been involved in a stand-off with Vivendi over TIM’s governance for weeks.
TIM’s board considered the inclusion of the motion by its statutory auditors “illegitimate” and a Milan court on Monday agreed.
Elliott, sometimes called a “vulture fund”, has repeatedly blasted the company’s performance since “Vivendi nominees” joined the board in December 2015 and offered its own list of six “independent” replacements, well known to the Italian business community.
That led to eight members of the TIM board announcing their resignations and another shareholders meeting being called for May 4 to elect a new board.
Elliot called that move “Vivendi’s cynical new attempt to avoid accountability and delay the shareholder vote.”
However the court highlighted the “necessity” of re-electing the whole board at next week’s meeting due to the mass resignations, saying that Tuesday’s meeting would have had an “impossible” agenda to enact given the conflict that would have arisen from it.
It also rejected Elliot’s accusations that the mass resignations were “abusive.”